Thad, a single taxpayer, has taxable income before the QBI deduction of $197,000. Thad, a CPA, operates an accounting practice as a single member LLC (which he reports as a sole proprietorship). During 2020, his proprietorship generates qualified business income of $157,600, W–2 wages of $118,200, and $8,400 of qualified property.
Taxable income before the QBI deduction = $197,000
The amount is above threshold amount of $163,300 but below $213,300.
Applicable percentage = 100% - [($197,000 - $163,300)/ $50,000] = 100% - 67.4% = 32.6%
Thad's qualified business income deduction = $157,600 * 20% * 32.6% = $10,275.52
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Thad, a single taxpayer, has taxable income before the QBI deduction of $197,000. Thad, a CPA,...
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